Britain's most senior independent reviewer for banking appeals has claimed that the UK's largest lenders have never sought out to upset customers as he tried to sidestep questions over whether he agrees with the infamous Tomlinson Report.

Speaking at a Treasury Select Committee (TSC) hearing on banks' lending practices to SMEs, Professor Russel Griggs OBE claimed that banks have always sought out the best option for the customer.

"I don't think I have ever seen a bank who has deliberately gone out of the way to upset the customer," said Griggs, the Independent External Reviewer of the Banking Taskforce Appeals Process.

"The customer may not be happy about the bank's decision but [the banks] are not vindictive."

When politicians asked Griggs if he could provide the evidence, which the independent body has , to show that banks are indeed being effective in the amount of financing it is providing SMEs, he said "I am not allowed to give this information."

He added that he is unable to comment on individual banks either.

Earlier on in the session, Griggs claimed that the finance industry is very competitive and that the public's perception over small to medium enterprise lending differs from reality.

Tyrie launched an inquiry into the groups' lending practices to small businesses after a report by Dr Lawrence Tomlinson suggested that the Royal Bank of Scotland pushed businesses into default after moving them into its Global Restructuring Group (GRG).

Meanwhile, the Financial Conduct Authority (FCA) kicked off its independent review of RBS's treatment of business customers in financial difficulty by appointing the Promontory Financial Group and Mazars to conduct the report in January.

In November last year, the FCA has asked a number of banks to confirm that they have not engaged in similar practices to those allegedly followed by RBS in which businesses were engineered into default while the firm profited from them.

The Tomlinson Report

Lawrence Tomlinson, an adviser to Britain's business secretary Vince Cable, claimed that RBS pushed businesses into default after moving them into its Global Restructuring Group (GRG).

He added that the 81% government-owned RBS also profited from their struggles as by moving them into GRG, this can create more revenue for the bank through higher fees and margins.

It can also result in the purchase of devalued assets by its property division, West Register.

Tomlinson runs LNT Group, based in the north of England which has annual revenue of £100m and has interests in construction, software, car manufacturing, and care homes.

"If the banks are engineering defaults as is suggested in the following sections of this report, it is important to remember that this closes all doors for the business," said Tomlinson in his report.

"Once they are moved into GRG they are considered risky. With the increased margins and fees, their cash flow will also be impaired, again making their proposition look less attractive to a competitor bank - even if the business has been artificially distressed due to the actions of the bank.

"If they have been missold a swap, the contingent liability of that swap on their assets may outdate the length of their facility agreement with the banks too.

"When it comes to moving banks they are unable to do so as their assets are all secured against the swap and there is therefore no security available for the new lender. The business will therefore not be able to meet the risk profile of the potential new bank and they are stuck with whatever terms their current bank offers, however onerous they may be."